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US paid family leave, explained

A young boy is comforted by his mother
Reuters/Caitlin Ochs
  • Lila MacLellan
By Lila MacLellan

Quartz at Work reporter

Published Last updated on

US Congress has approved a potentially history-making paid family leave plan as part of a larger social spending bill.

If the “Build Back Better” plan can now survive a Senate vote and be passed into law—and if Democrats can protect the already-pared down paid family leave program from further trimming—it would be a political win not just for the Biden administration and its Democratic supporters, but also for women’s groups that have fought for this benefit for years, knowing women still disproportionately shoulder the burden of unpaid family care.

Right now, only a minority of Americans can take time off to care for a newborn, or a family member (or themselves for that matter!) without losing their income—and that’s because either their employers offer it, or because they’re from one of a handful of states (or the District of Columbia) which offer paid medical leave. Or both.

For everyone else, the federal Family and Medical Leave Act (FMLA) guarantees up to 12 weeks of unpaid time off, but only if you work for a company with more than 50 employees.

All too often, this results in women leaving the workforce when caregiving duty calls, or returning to work, just days after giving birth. Among rich countries, this is a uniquely American reality. The US is one of only six countries globally that doesn’t offer paid medical leave.

Advocates say Biden’s paid leave plan could help. Here’s how.

What is paid family leave?

The proposed universal paid family leave plan would allow working US adults to take up to four weeks away from their job to care for themselves, a new child, or a family member—including members of a person’s family of choice—without losing their income.

Companies would be obliged to allow applicants to take time off, but the compensation would come directly from the government, as opposed to being funded through payroll taxes.

In the US, some states and the District of Columbia have already passed versions of universal paid family leave. If Biden’s plan passes, people who live in those states would most likely continue to access their state paid leave plans, says Vicki Shabo, a senior fellow at New America, a policy think tank.

Who will be covered and under what circumstances?

Roughly speaking, three categories of people would be covered, according to Neil Sroka, communications director at PL+US (Paid Leave for the United States), an advocacy group based in Washington DC.

  • Parents who need time to either recover from childbirth or look after a newborn or adoptee
  • Caregivers, such as adults providing elder care or looking after an ill family member, including children, spouses, siblings, and others “related by blood or affinity and whose association with the employee is equivalent of a family relationship,” according to the current draft of the proposal [PDF]
  • Individuals who themselves fall ill and need time off to care for their own health

Notably, the amount of time someone has worked for their employer at the time of their application would not determine whether they would be eligible, says Shabo. Instead, to qualify for the benefit, applicants would need to show that they have earned at least $2,000 in the roughly two-year period leading up to the time of the leave, and that income could come from any form of work, including gig work, part-time jobs, and self-employment.

They would also need to provide evidence that they need at least four hours per week of caregiving or medical leave, most likely by providing a doctor’s note, just as required under FMLA rules.

Administrators for the new paid leave program, which would be housed within the Social Security Administration, would calculate a person’s benefit payments based on their average weekly income from all sources during the two years leading up to the time of the paid leave.

How much pay would I get while on paid leave?

Like most countries, the US would not fully compensate a worker on medical leave (though companies would be free to top up the benefit.) Instead, people would be partially compensated according to a sliding scale, so that low-income earners are reimbursed the most (up to 85% of their weekly pay) and high-income earners would receive the least, as little as 5%. (Payments are capped at about $3,200 a month.)

This system provides the most critical support for low-income workers who may be living paycheck to paycheck, says Shabo. Middle and higher-income workers are more likely to have other sources of income they can tap, so adjusting payments accordingly would be “an effective use of federal funding,” she says.

The payments would cover the time spent on leave, so they might be prorated for someone who needs to take only one day off per week for chemotherapy treatment, for instance, whereas new parents would be more likely to take consecutive weeks off.

Who is paying for this?

The Biden administration has proposed paying for the entire $1.85 trillion social spending bill—which includes the paid leave proposal—through a mix of corporate taxes, tax enforcement, and a new billionaire’s tax. It’s not yet clear which of these sources would be earmarked for the paid family leave plan specifically.  This makes the program a bit different from social security and unemployment benefits which are funded by employer contributions and a regular payroll tax.

However, the Congressional Budget Office this week reported that its projections for how much additional revenue would be generated by the Democrat’s proposed tax reforms differs from that of the White House. In its estimation, the bill’s measures would actually add an extra $160 billion to the US deficit over 10 years.

Why just four weeks?

This is a glass-half-full situation.

Biden’s initial proposal called for 12 weeks of paid leave, which would have cost an estimated $500 billion over 10 years. After running into opposition from West Virginia senator Joe Manchin, a democrat, the bill’s champions chopped paid family leave to four weeks, which brought the estimated price tag down. The program is now expected to cost $200 billion.

Paid leave was removed from the bill entirely, then quickly added back in after advocates—including the Duchess of Sussex—rallied around the cause.

Globally, the average maternity leave alone lasts 29 weeks, so even a 12-week scheme would have left the US lagging other countries. But supporters say four weeks are better than none—and this is likely the beginning of a longer campaign.

Democrats now hope to push the spending bill into law in the window between the Senate’s return from Thanksgiving break and the Christmas holidays.

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